Black Business Council: wrong step in the right direction?

Sipho Hlongwane

Sipho Hlongwane

Sipho Hlongwane is a writer and columnist for Daily Maverick. His other work interests also include motoring, music and technology, for which he has some awards. In a previous life, he drove forklift trucks, hosted radio shows, waited tables, and was once bitten by a large monitor lizard on his ankle. It hurt a lot. Arsenal Football Club is his only permanent obsession.

He appears in these pages as a political correspondent.

12 Sep 2011 07:11 (South Africa)

Last week, several black professional organisations split from Business Unity SA to form the Black Business Council. While it may be understandable to react to a perceived snail’s pace of transformation in business, is forming a new race-defined lobby group the right move, or should business people rather stick it out in Busa? In fact, is it even Busa’s task to transform business in SA?

I don’t see any particular reason why black business should have stuck with something that wasn’t serving its interests.

Speaking at the Black Business Summit last week, President Jacob Zuma said, “As government, we need a unified and united business voice to work with. The time to differ, I think, is gone.”

Which is all very well, for government. It really does need a unified business front with which to work, because one of the ANC government’s main goals when it comes to business is to infuse policies of employment equity and black economic empowerment. The reason the government first chose to robustly pursue affirmative action and employment equity in the public sector is that it controls those companies and entities. Private business is a different kettle of fish.

And that’s why I’m personally cautiously happy that black business decided to ignore Zuma’s plea for business unity. What Zuma probably meant is that he liked Busa as it was, and by extension, the role it played within the National Economic Development and Labour Council (Nedlac), the primary negotiation forum between government, business and organised labour.

Was Busa an overall good deal for black business?

I don’t believe so.

I don’t care much for the power struggle between the Black Management Forum and Busa. The BMF was wrong to demand the reins to the organisation when it was only one body among many within Busa.

I believe the BMF’s split from Busa and the BBC’s reconstitution were informed by the same fact: black people are still a minority in business. There are way too few black professionals in managerial positions in South African businesses, and way too few black businesses. Mondli Makhanya said of the Busa split, “It is rather bizarre that those who make up the majority of the country's population feel the need to become a ‘breakaway’ faction”, which would be a reasonable point to make if black people held the majority of economic power. They don’t. Blacks are still an economic minority.

Frans Cronje of the SA Institute for Race Relations criticised the move by the BBC, saying it had turned its back on the very people it expected to subsidise its operations. He actually pointed out the exact problem of a lack of transformation in business. He wrote, “They want government funding... In other words, they expect taxpayers to subsidise their new operation. It must be lost on them that this tax was generated by the same private business sector they have just walked out on.” That is the exact challenge black business needs to overcome in South Africa. Revenue generated from tax must come from black businesses, which would show that at last blacks are the dominant economic force in South Africa.

The BMF’s response to this was to demand that it gets to rule the roost. It managed to appoint the previous two leaders of Busa. The former CEO Jerry Vilakazi came from the BMF. So did his predecessor Bheki Sibiya. When this proved to be too little a consolation prize, it demanded more power – and walked away when it didn’t get it.

The BBC has chosen to follow the BMF’s lead. The organisation said it would “ensure unity in black business first and foremost”. Its goal is to be Busa’s negotiating equal (one presumes on forums such as Nedlac).

Black businesspeople in South Africa may have inadvertently shot themselves in the foot here. The government could decide to keep the purse to be shared among Busa and its former affiliates the same, meaning that everyone (including those advancing the interests of black business) get less. In that respect, it might have been smarter for black business to stay within Busa, and force internal change to reflect the rise of black economic power.

One of the BBC’s stated goals is for government to establish a ministry to support small businesses and a government purse to be established to finance black construction firms. This is precisely what the richest man in SA, Patrice Motsepe and other successful black businesspeople should be lobbying for. We need more black businesses, not necessarily for the few that exist to have more clout. Certainly, the latter should not happen at the expense of the former. DM

Read more:

Corporate SA and black business need to get with the programme in TimesLIVE;

Sipho Hlongwane is a writer and columnist for Daily Maverick. His other work interests also include motoring, music and technology, for which he has some awards. In a previous life, he drove forklift trucks, hosted radio shows, waited tables, and was once bitten by a large monitor lizard on his ankle. It hurt a lot. Arsenal Football Club is his only permanent obsession.

He appears in these pages as a political correspondent.

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Sipho Hlongwane is a writer and columnist for Daily Maverick. His other work interests also include motoring, music and technology, for which he has some awards. In a previous life, he drove forklift trucks, hosted radio shows, waited tables, and was once bitten by a large monitor lizard on his ankle. It hurt a lot. Arsenal Football Club is his only permanent obsession.